Transcript Emigration and Educational Attainment in Mexico

Illegal Migration: Lecture 5
Gordon H. Hanson
UCSD and NBER
Introduction

What we’ve done so far




Scale, selection and sorting in international migration
Labor markets impacts of emigration and immigration
Public finance consequences of international labor flows
Today’s lecture

Illegal migration
2
Introduction

One morning in San Diego…

As neighborhood residents depart for work, illegal immigrants arrive
to mow lawns, clean homes, care for children, and build houses



Down the road, they prepare restaurant meals, clean hotels,
harvest crops, assemble apparel, and process food
What is exceptional about this scene is not that it happens in CA (or
FL, TX or NY) but that it is repeated in Las Vegas NV, Little Rock AR,
Atlanta GA, Detroit MI, and cities throughout Europe
Illegal immigrants are an integral part of the US economy


With a population of 10 million, 6-8 million of whom work, illegal
immigrants are no longer a marginal segment of the US labor force
Gone are days when illegal laborers were confined to farms – they’re
now a part of US construction, service and manufacturing industries
3
Legal status of US immigrants, 2005
Legal Permanent
Resident Aliens
10.5 million (28%)
Unauthorized Migrants
11.1 million (30%)
Temporary Legal Residents
1.3 million (3%)
Naturalized Citizens
11.5 million (31%)
Refugee Arrivals
2.6 million (7%)
4
5
6
7
Introduction

Mexico is the main source country for US illegal immigration



Policy issues



In 2006, the 11.5 million Mexican immigrants in US were 31% of US foreignborn population and 10% of total population of Mexico
Of Mexican immigrants in the US, 6 million appear to be here illegally
 56% of Mexican immigrants are illegal, compared to 17% of those from
other countries (Mexico accounts for 57% of all US illegal immigrants)
US: Give amnesty to illegal immigrants? Admit more guest workers?
Militarize US borders? Deny benefits to illegals? Issue national ID cards?
Mexico: Loss in labor supply, disappearance of young men in many regions,
rise in remittances, easing of pressure on policy makers to make hard choices
In this lecture, I review academic literature on



Stocks and flows of illegal migrants
The supply of and demand for illegal migrants
Policies to regulate illegal immigration
8
Share of All US Immigrants
Share of Mexico Population
Share of US Population
.3
.3
.2
.2
.1
.1
0
0
1960
1970
1980
1990
2000
Mexican Immigrants in the US
9
Measuring Illegal Immigration

Most common measure is the residual foreign born



Enumerated immigrants – (legal immigrants – departures – deaths)
Specialized surveys

Mexican Migration Project (1982, 1987-1997)
 Household survey conducted in winter months in several dozen highmigration rural communities in western Mexico
 In each community, MMP surveyed a random sample of households (not
panel data) on current and past migration behavior of members

National Survey of Demographic Dynamics (ENADID; 1992, 1997)
 National survey by Mexican government similar in design to the MMP

Survey of Newly Legalized Persons (1989, 1992)
 Covered illegal immigrants residing in CA granted permanent legal
residence in US under amnesty provision of IRCA
Other methods (enforcement data from US Border Patrol)

Apprehensions of those attempting illegal entry at US-Mexico border
10
Estimates of US Illegal-Immigrant Population, 1990-2004
Population of Illegal Immigrants from Mexico in the United States (millions)
INS
Constanzo et al.
Bean et al. (2001a, 2001b)
Passel
(2001)
(2003)
Undercount Rate
(2005)
Year
15%
Median
25%
1990
2.040
1.008
--
--
--
--
1996
--
--
1.524
2.543
3.706
--
2000
4.808
3.872
--
--
--
--
2001
--
--
3.462
4.510
5.765
--
2002
--
--
--
--
--
5.300
2003
--
--
--
--
--
--
2004
--
--
--
--
--
5.900
11
Illegal immigrants in the US
Unauthorized Immigrants, millions
14
11.6
11.1
12
10
8.4
8
6
5
4
4
3
3.9
3.3
2.6
2
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
Year
12
Illegal immigrants by country of birth, 2006
All Others
2.9 million (25%)
Mexico
6.6 million (57%)
Philippines, Korea,
China, and Vietnam
0.9 million (8%)
Central America
1.2 million (11%)
13
Migrant and Non-Migrant Mexican Nationals, Males
Mexico Migration Project, 1989-1991
In Mex. at time of Survey
Percent Male
1990 US
Census
1990 MX
Census
All
Respondents
Currently
on last
migration
In US at
time of
survey
1989
LPS
56.2
48.0
48.7
64.7
55.9
57.2
Years of
None
9.6
9.2
5.2
3.8
2.1
4.0
Schooling
1 to 8
10.3
17.3
23.4
24.3
15.3
19.7
9 to 15
48.9
35.7
31.4
28.7
42.8
36.7
16 plus
3.2
7.7
7.5
1.8
5.6
0.5
Work in Agriculture
15.5
23.9
28.9
31.2
9.1
11.9
Years
0 to 5
28.8
65.6
45.2
36.9
13.9
in US
6 to 10
23.4
14.8
17.3
20.2
19.4
11 to 20
35.7
15.2
28.2
36.3
6.7
20 plus
12.2
4.5
9.3
6.6
59.9
14
6000
4000
0
0
2000
500
Officer hours
1000
8000
1500
10000
Linewatch apprehensions & enforcement by US Border Patrol
1970
1980
1990
2000
Year...
Apprehensions (000s)
Officer Hours (000s)
15
Estimated Attempts at Illegal Entry along US-Mexico Border
ln(Apprehensions) - 0.8*ln(Officer Hours)
1
0
-1
-2
-3
1970
1975
1980
1985
Year
1990
1995
2000
2005
16
The Economic Return to Migration

Who migrates and why?

Benefit of illegal migration


Gain in income due to wage differences between US and Mexico
Costs of illegal migration




Transport to border (small)
Psychic penalty of leaving home (unmeasureable?)
Expense of settling in US (not measured)
Cost of crossing the border (physical, monetary)


Evidence from fees charged by smugglers (coyotes)
Selection of migrants


If benefits and costs vary according to skill, wealth, or other
individual attributes, then migrants will be a self selected group
Nature of migrant selection matters for impact on US and Mexico
17
Average Hourly Wages for Mexican Males, 2000
Years of Schooling Completed
Age
0 to 4
5 to 8
9 to 11
12
13 to 15
16+
Mexican
18 to 22
7.83
7.60
7.45
8.07
8.76
8.44
Immigrants
23 to 27
8.44
8.19
8.21
9.06
9.53
13.02
in US
28 to 32
8.27
8.56
8.70
9.66
9.56
15.69
(0-3 years)
33 to 37
9.46
9.25
9.34
10.07
11.36
16.84
38 to 42
9.19
9.39
9.33
11.01
12.11
16.26
Residents
18 to 22
1.36
1.56
1.76
2.06
2.61
3.91
of Mexico
23 to 27
1.43
1.80
2.10
2.79
3.77
5.20
28 to 32
1.56
1.93
2.42
3.22
4.80
6.63
33 to 37
1.65
2.08
2.56
3.45
5.25
7.07
38 to 42
1.64
2.14
2.88
3.74
5.62
7.42
18
Border Apprehensions and US-Mexico Relative Per Capita GDP
Ln Apprehensions
Ln US-Mexico Per Capita GDP
.2
Ln Apprehensions
.1
.75
0
.25
-.1
Ln US-Mexico Per Capita GDP
1.25
-.2
-.25
1975
1980
1985
1990
Year
1995
2000
2005
19
Border Apprehensions and Average Wages in Mexico
Coeff.=-0.60, Std. Error=0.10
Log Border Apprehensions
.6
0
-.6
-.25
0
Log Mexico Hourly Wage
.25
20
Educational Attainment for the Mexico Born Population, 2000
21-65 Year Olds
Males
28-37 Year Olds
Residents
Mex. Imm.
Residents
Mexican Immigrants in US
of Mexico
in US
of Mexico
0-3 Yrs
4+ Yrs
0-9
0.694
0.601
0.648
0.538
0.512
10-15
0.193
0.350
0.232
0.399
0.443
16+
0.113
0.050
0.121
0.062
0.046
Highest
Grade of
Schooling
(%)
21
Mexican Immigrant Wage Density (counterfactual) minus Mexican
Resident Wage Density (actual) in 1990 and 2000, Males
Male self selection in 2000
Male self selection in 1990
.085
0
-.085
-3
-2
-1
0
lnw
1
2
3
22
Mexican Immigrant Wage Density (counterfactual) minus Mexican
Resident Wage Density (actual) in 1990 and 2000, Females
Female self selection in 2000
Female self selection in 1990
.085
0
-.085
-3
-2
-1
0
lnw
1
2
3
23
Churning in the Illegal Immigrant Population


Many illegal immigrants do not remain illegal forever

Ultimately, many (one-third?) obtain a US green card through
sponsorship by a family member who is a US citizen or legal resident

Since queues to obtain a green card are five years or longer, many
migrate illegally and wait for a green card as an illegal immigrant in US
(during which time they work, settle in communities, start families, etc.)
Evidence

Many Mexican immigrants who receive green cards are at the time they
obtain their visas residing in US illegally



From 1992 to 2002, 56% of Mexican nationals receiving green cards are
adjusting status (implying they are already residing in the US)
Some of those adjusting their visa status are temporary legal immigrants who
have succeeded in obtaining permanent visas
However, for Mexican immigrants, majority of status adjusters appear to have
been living in US as illegal immigrants
24
Legal Immigrants
Share Adjusting Status
.8
Legal Immigrants
.6
200000
.4
150000
Share Adjusting Status
250000
.2
100000
0
1992
1994
1996
1998
2000
2002
2004
US Legal Immigration from Mexico
25
26
Migration Rates to US by Mexican States, 1950s and 1990s
Is historical persistence in regional migration pattern due to presence of
migration networks or US family sponsored immigration policies?
Zacateca
.15
Share of Households Sending
Migrants to the US, 1995-2000
Michoaca
Guanajua
.1
Hidalgo
Morelos
Nayarit
San Luis
Aguascal
Durango
Jalisco
Guerrero
Colima
Queretar
Oaxaca
.05
Puebla
Sinaloa
Veracruz
Tamaulip
Mexico
Tlaxcala
Baja Cal
DF
Sonora
Baja Cal
Yucatan
Campeche
Chiapas
Quintana
Tabasco
Chihuahu
Coahuila
Nuevo Le
0
0
.02
.04
Share of Residents Migrating to US, 1955-1959
.06
27
Migration Rates to US by Mexican State and Distance to US
Zacateca
.15
Househlds w/ Migrant in US, 2000
Michoaca
Guanajua
.1
Durango
Aguascal
Morelos
San Luis
Hidalgo
Nayarit
Jalisco
Guerrero
Colima
Queretar
Oaxaca
.05
Chihuahu
Puebla
Sinaloa
Veracruz
Mexico
Tlaxcala
Tamaulip
Coahuila
Baja Cal Nuevo Le
DF
Sonora
Baja Cal
Tabasco
Yucatan
Chiapas Campeche
Quintana
0
0
500
1000
1500
Kilometers to US Border
2000
2500
28
The railroad connection, 1906
29
Braceros en route to the US, 1950s
30
The undocumented era, 1964 - present
31
Average smuggler’s fee at US-Mexico border
AVERAGE MIGRANT SUMGGLER'S FEE, 1971-2004
3,000
2,000
1,500
1,000
500
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
19
73
0
19
71
U.S. dollars
2,500
YEAR
32
US Enforcement Policies and Illegal Immigration

Illegal immigration:

The US Border Patrol polices US borders, apprehends and
deports those attempting to enter country illegally
 Centerpiece of US policy: 12,000 officers police border,
concentrating on specific points along US-Mexico border
 Over the last decade, US enforcement budget has increased
dramatically (with much of increase coming before 9/11)

Government agents monitor US employers suspected of hiring
illegal aliens, issue fines to those they detect and convict
 Not until 1986 did it become against the law for US
employers to hire an illegal immigrant
 Employer monitoring is lax, with less than 300 agents to
inspect all US worksites; few fines levied, most are small
 In practice, US employers are more or less free to hire any
worker with a social security card and a green card without
risk of prosecution (even if documents are fake)
33
Illegal Immigrants Located by US Authorities, 1992-2004
1992
1994
1996
1998
2000
2002
2004
1.258
1.095
1.650
1.679
1.815
1.062
1.241
Share located by ICE/INS Agents
0.047
0.058
0.061
0.074
0.076
0.101
0.065
Share located by Border Patrol
0.953
0.942
0.939
0.926
0.924
0.899
0.935
Mex. aliens seeking employment
0.888
0.874
0.907
0.899
0.910
0.861
0.860
Mex. aliens at US worksite
0.011
0.013
0.008
0.006
0.002
0.005
0.005
Mex. aliens unspecified
0.076
0.082
0.068
0.073
0.064
0.095
0.070
Other aliens
0.026
0.031
0.017
0.021
0.024
0.039
0.065
Total deportable aliens located
(millions)
Of Border Patrol deportable
aliens located, share that are:
34
Mexico
U.S.
35
Migrants Take More Dangerous Routes Around Border Patrol Operations
Major
Border Patrol
Operations
New Migration
Routes
SOURCE: Cornelius 2005
36
Linewatch Enforcement by US Border Patrol Region
Texas
Arizona
Western California
Eastern California
Officer Hours in Thousands
5000
4000
3000
2000
1000
0
1975
1980
1985
1990
Year
1995
2000
2005
37
Linewatch Apprehensions by US Border Patrol Region
Texas
Arizona
Western California
Eastern California
Apprehensions in Thousands
600
400
200
0
1975
1980
1985
1990
Year
1995
2000
2005
38
Deaths due to unauthorized border crossings
600
499
491
500
431
391
400
329
371
373
300
200
149
87
100
61
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: Mexican Consulates/Mexican Ministry of Foreign Relations.
39
Enforcement against Illegal Immigration

Political economy of enforcement

There is a long history of immigration authorities responding to
pressure from business interests not to enforce too effectively
 Rio Grande Valley of TX, Central Valley of CA, onion farmers in
GA, meat packing in Great Plains, lettuce growers in AZ
 Border enforcement falls 6-10 months after an increase in the
relative product price in labor-intensive industries (apparel, meat
packing, perishable crops, construction)

Border Patrol accommodates pressures from residents in border
cities (by stopping illegal immigrants from crossing in their back
yards) and pressure from industry (by allowing immigrants in)

Enforcement at US worksites has virtually disappeared
 From 1993 to 2004, the number of employers fined for hiring
illegal immigrants fell from 799 to 14 and the number of fines
levied in excess of $50,000 fell from 30 to 0
40
The Supply and Demand for Migrants

If incomes in US have long exceeded those in Mexico,
why has Mexico-to-US migration surged only recently?

Changes in the demand for labor

The demand for labor in Mexico would decrease relative to the
demand for labor in the US if:




Mexico’s productivity or capital supplies decreased relative to the US
Mexico’s terms of trade decreased relative to the US
Mexico’s economy became more volatile relative to the US
Changes in the supply of labor

Holding wages constant, Mexico-to-US migration would increase
if Mexico’s supply of labor increased relative to the US
41
The trajectory of labor supply over time:
0
1000000 2000000 3000000 4000000
Labor Supply, US versus Mexico
1900
1920
1940
1960
1980
2000
Birth year
US
Mexico
42
Comparing relative changes across countries
0
1
2
3
4
5
Growth in US vs. MX labor supply, 1910=1
1900
1920
1940
1960
1980
2000
Birth year
US native born
Mexico
Only after peak of baby boom does relative Mexican growth take off
43
Labor demand shocks: Post 1980 Mexico slow down
0
10000
20000
30000
40000
GDP per capita, US vs MX
1940
1960
1980
2000
Year
MX
US
44
Labor demand shocks: Post 1980 Mexico slow down
1
2
3
4
GDP per capita, US vs MX, 1940=1
1940
1960
1980
2000
Year
US
MX
45
Theory

US wage is function of labor demand shock and labor supply (US
population plus immigration; immigrants less productive: τ < 1)
ln wtus  ln X tus   ln( Lus
0  Mt )

Mexico wage is function of labor demand shock and labor supply
(Mexico population minus emigration)
ln wtmx  ln X tmx   ln( Lmx
0  Mt )

Current migration is function of lagged wage, subject to migration
elasticity (0 < σ < ∞) and migrant networks (C > γ > 0)
m*it



M t 1
M
us
mx
   ln wt 1  ln wt 1   mx  C  , m*it  mxt
L0
L0


Solution for change in emigrant stock as share of Mex. pop.:
t 1
w0us
*
* *
*
*
mit   i 0 1   
, i 0  ln mx  C
    1    

w0


46
Theory

Linearizing
m     
*
it
*
i0
*
*
i0
 t  1  

* 2
    1    

Migration is increasing in the initial US-Mexico wage differential
(increasing in MX labor supply, decreasing in MX labor demand)

Time trajectory of migration depends on:





(1) elasticity of labor demand (given by η < 0)
(2) relative productivity of Mexican immigrants in US (given by 1>τ>0)
(3) network effect (given by γ > 0)
If (1)+(2) dominate (η(1+τλ) + γ < 0), emigration rate decreases
over time as wage effects moderate outflow
If (3) dominates (η(1+τλ) + γ > 0), emigration rate increases over
time as network raises incentive to go to US
47
Specification

Empirical specification for emigration rate of cohort with
birth year (i), gender (j), birth state (s), in year (t):
mijst  lijs  1   2 t  1  xist  A  I  J  S  T   ijst

lijs is initial MX-US relative labor supply and demand

xist is subsequent shock to relative labor demand

A, I, J, S, T are fixed effects for age, birth year, gender, birth
state, and census year
48
Data


Mexico population census (1960, 1970, 1990, 2000)

Define cohort as number of individuals born in a given year in a
given state (base size is first time cohort appears in a census)

Net emigration rate is the intercensal % change in cohort size
Measurement issues:

Rounding error (aggregate cohorts around zeroes and fives)

Mortality (use 16-50 year olds; age, gender, state, birth year FEs)

Heteroskedasticity (trim tails, vary aggregation of cohorts)
49
Net emigration

Estimated share of migrants living in US
mijst 


base cohort sizeijs  current cohort sizeijst
base cohort sizeijs
for cohort with birth year (i), gender (j), birth state (s) in year (t)
Measure US cohort size using national labor supply

We implicitly model US low-skilled labor supply as function of
national labor supply and gender, birth-year, time effects

Problems with using US low-skilled labor supply directly:

i) many US natives still in school in key 16-20 age group, ii) high
school completion endogenous to immigration, iii) measurement error
50
Variation in per capita GDP across states: globalization and
the post 1985 divergence in regional income growth
0
10000 20000 30000 40000
GDP per capita, by Mexican State
1940
1960
1980
2000
Year
Oaxaca
Morelos
Distrito Federal
Nayarit
Mexican Average
Queretaro
Rank of 2000 GDP pc: D.F.=1, Queretaro=9, Morelos=16, Nayarit=24, Oaxaca=32
51
Specification

Empirical specification for emigration rate of cohort with
birth year (i), gender (j), birth state (s), in year (t):
mijst  lijs  1   2 t  1  xist  A  I  J  S  T   ijst

lijs is initial MX-US relative labor-market conditions

xist is subsequent shock to relative labor demand

A, I, J, S, T are fixed effects for age, birth year, gender, birth
state, and census year
52
Estimation results
Men Only
Women Only
IV
IV
0.1876
0.1053
(11.51)**
(7.54)**
-0.0261
-0.0168
(1.13)
(1.01)
-0.0297
-0.0028
(0.59)
(0.09)
Observations
1124
1134
R-squared
0.25
0.31
State, census yr, Sex,
10yr birth cohort
State, census yr, Sex,
10yr birth cohort
Dependent variable: decadal change in net
migration rate
log (MX State cohort size/US HS dropouts)
log (MX State GDP/US GDP) at age 16
10-yr change log(MX State GDP/US GDP)
Fixed Effects Used:
53
54
Concluding Discussion

In the US, illegal immigration now accounts for one-third
to one-half of net immigrant inflows

Issue for future research on causes of illegal immigration:

Introducing questions about migration status into official surveys

US immigration policy and transitions from illegal to legal status

Sources of heterogeneity in costs and benefits of migration

Effectiveness of border enforcement

Political economy of immigration policy: border vs. interior policing
55